Shares of Centurion (OU8.SI) plummeted 3.45% in Friday's trading session, as investors reacted to news of lower projected earnings for 2026 following the company's strategic asset spin-off. The Singapore-based property group's decision to create a new REIT with some of its assets has led to a reassessment of its future financial performance.
According to RHB Research analyst Alfie Yeo, the removal of certain properties' contributions to Centurion's earnings due to the REIT spin-off has resulted in lower earnings estimates for 2026. However, Yeo maintains a bullish outlook on the company, citing potential benefits from the restructuring. Centurion is expected to receive service income from managing the REIT's properties, which could lead to higher gross and operating margins in 2026.
Despite the short-term impact on earnings, RHB Research remains optimistic about Centurion's future prospects. The company is anticipated to focus on developing and acquiring properties with the cash generated from selling assets to the REIT. Yeo suggests that Centurion might explore new markets, including the Middle East, for its acquisitions and property development projects. While RHB Research has reduced its target price for Centurion from S$2.01 to S$1.85, it maintains a buy rating on the stock, indicating confidence in the company's long-term strategy.